Hal was totally playing with Kyle there, he could've ended it easily, he just wanted Rayner to give up and give him the ring rather than kill him.
That it's now a fear-bug.
That doesn't change the power level of the original Parallax, mind you- he had the might of the Central Battery in him and that's why he was so insanely powerful, not the bug, so the strength isn't affected by the retcon anyway.